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Avco Fifo

This document provides information to calculate inventory valuation using the AVCO method under both a periodic and perpetual inventory system. It gives beginning inventory, purchases, and sales in units and dollar amounts for March. The summary calculates ending inventory value as $776 for periodic and $796 for perpetual using a weighted average unit cost under each system.

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Muhammad Talha
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846 views

Avco Fifo

This document provides information to calculate inventory valuation using the AVCO method under both a periodic and perpetual inventory system. It gives beginning inventory, purchases, and sales in units and dollar amounts for March. The summary calculates ending inventory value as $776 for periodic and $796 for perpetual using a weighted average unit cost under each system.

Uploaded by

Muhammad Talha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Example

Apply AVCO method of inventory valuation on the following information, first in periodic inventory system
and then in perpetual inventory system to determine the value of inventory on hand on Mar 31 and cost of
goods sold during March.
Mar 1

Beginning Inventory

60 units @ $15.00 per unit

Purchase

140 units @ $15.50 per unit

14

Sale

190 units @ $19.00 per unit

27

Purchase

70 units @ $16.00 per unit

29

Sale

30 units @ $19.50 per unit

Solution

AVCO Periodic
Units Available for Sale

= 60 + 140 + 70

= 270

Units Sold

= 190 + 30

= 220

Units in Ending Inventory

= 270 220

Weighted Average Unit Cost

Units

Unit Cost

Mar 1 Inventory
Mar 5 Purchase

= 50
Total

60

$15.00

$900

140

$15.50

$2,170

70

$16.00

$1,120

270

* $15.52

$4,190

220

$15.52

$3,414

50

$15.52

$776

27 Purchase
* $4,190 270
Cost of Goods Sold
Ending Inventory

AVCO Perpetual
Date

Purchases
Units

Unit Cost

Sales
Total

Units

Unit Cost

Balance
Total

Mar 1
5

140

$15.50

$2,170

14
27

29
31

190
70

$16.00

$15.35

$2,916

$1,190

30

$15.92

$478

Units

Unit Cost

Total

60

$15.00

$900

60

$15.00

$900

140

$15.50

$2,170

200

$15.35

$3,070

10

$15.35

$154

10

$15.35

$154

70

$16.00

$1,120

80

$15.92

$1,274

50

$15.92

$796

50

$15.92

$796

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